GM car plants start to feel effects of strike at parts firm

As auto supplier American Axle axl enters its second month with much of its union-represented workforce on strike, the impact is spreading beyond General Motors' gm truck plants and now beginning to affect GM's car production.

Nearly 30 General Motors plants are affected in some way, with production slashed to just one shift or plants shuttered entirely. Much of the impact has been at plants making large trucks and SUVs that have been selling slowly in recent months as gas prices and the slowing economy take their toll on that end of the car market.

But as early as next week, GM's plant in Lordstown, Ohio, which makes the compact Chevrolet Cobalt and Pontiac G5, could close as well. On Thursday, GM told workers at a plant in Detroit that makes the Buick Lucerne and Cadillac DTS sedans that the plant will be closed next week.

Talks broke down between American Axle and the United Auto Workers union in late February, and the strike began affecting GM, its primary customer and former parent, within days.

At issue is American Axle's labor costs. The auto supplier, which was spun off from General Motors in 1994, wants to slash its overall labor costs by $40 an hour. Renee Rogers, spokeswoman for American Axle, says the supplier pays $73 an hour for wages, pensions, health care and supplemental unemployment pay. The company wants to get that number to $20 to $30 an hour.

"We are willing to do early retirements, to do buyouts," she says. "We're willing to do all of that to soften the landing for our workers."

But first, she says, the United Auto Workers union needs to bring its top leadership back to the bargaining table. Both sides met Thursday, but only American Axle's top executives were present, while the union sent midlevel negotiators, Rogers says.

In an interview with the Detroit Free Press published Thursday, American Axle CEO Dick Dauch said the auto supplier won't be forced into bankruptcy-court protection by a strike and will begin making the parts in its foreign plants in Mexico, South America, Europe and Asia if need be.

Rogers says Dauch and American Axle don't want to move operations abroad. The supplier has two union-represented plants in Ohio and Michigan that are operating and have competitive contracts in place, and it could move more business there.

GM began March with about 59 days' worth Cobalts sitting on dealers' lots. The industry average is about 65 days' worth. Dealers had about 110 days' worth of Pontiac G5's at the start of the month.

David Cole, chairman of the Center for Automotive Research, says GM is under little pressure to get any of its lines back up and running.

"There's a lot of inventory out there, and whether it's cars or big trucks, it's no big deal," Cole says.